Hari Ram (Deceased) Thr. His LRs. vs Land Acquisition Collector cum District Revenue Officer Gurgaon
Background
Land in Village Bhondsi, Tehsil Sohna, District Gurgaon was acquired in 1996 under the Land Acquisition Act, 1894 for setting up a Liquified Petroleum Gas Plant. The Land Acquisition Officer initially fixed compensation at Rs. 5,30,000 per acre for irrigated land and Rs. 2,00,000 per acre for non-irrigated land, and the Reference Court equalised both at Rs. 5,30,000 per acre. The Punjab and Haryana High Court later enhanced this to Rs. 7,00,000 per acre in a common judgment covering several connected first appeals. Dissatisfied with this enhancement as still inadequate, the landowners appealed to the Supreme Court.
Decision Breakdown
The Supreme Court found that the High Court had wrongly discarded two sale exemplars (Ex. P3 and Ex. P4) relied on by the landowners merely because they involved a private company (M/s. Orient Express Pvt. Ltd.) as buyer and showed price variation from another exemplar. The Court held this reasoning was erroneous: a company reselling land after purchase would naturally command a higher price, and that alone did not make the exemplars unreliable. Relying on Ex. P4 (a smaller parcel), the Court applied a 35% deduction for smaller land size and lesser development need (since the land was meant for an LPG plant, not housing), arriving at a revised, higher compensation of Rs. 12,16,800 per acre. All the appeals were accordingly partly allowed to this extent, with no order as to costs.
Lesson Learnt
In land acquisition compensation disputes, courts must evaluate sale exemplars on their genuine evidentiary merit; the mere fact that a sale involved a company buyer/seller, or that prices varied between transactions, is not by itself a valid ground to reject an otherwise relevant sale instance when fixing fair market value.